Yesterday I pointed out that the USDCAD pair has managed to respect the kijun-sen (yellow line indicator) since 1.39 and has not broken below it since then. However today we have seen at least one 4 hour candle close below it and at the same time the upward sloping channel since 1.38 is being challenged. With many divergence signals and after such a huge rally, this might be the time for a trend reversal in USDCAD. At least a short-term reversal is long overdue and much-anticipated.
Longer-term trend remains bullish as price remains above the Ichimoku cloud. This correction could push the pair towards the lower channel boundary of the longer-term channel, near 1.42. So we could see a +200 pips decline from current levels.
I believe we have confirmation of a short-term trend change and USDCAD bulls should be very cautious. This also implies that we should expect a bounce in Oil prices too. Will wait and see how this idea goes.
Have a nice day and thank you for taking the time to catch up on my thinking.